Correlation Between WuXi Xinje and Dow Jones
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By analyzing existing cross correlation between WuXi Xinje Electric and Dow Jones Industrial, you can compare the effects of market volatilities on WuXi Xinje and Dow Jones and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WuXi Xinje with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi Xinje and Dow Jones.
Diversification Opportunities for WuXi Xinje and Dow Jones
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WuXi and Dow is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding WuXi Xinje Electric and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and WuXi Xinje is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WuXi Xinje Electric are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of WuXi Xinje i.e., WuXi Xinje and Dow Jones go up and down completely randomly.
Pair Corralation between WuXi Xinje and Dow Jones
Assuming the 90 days trading horizon WuXi Xinje Electric is expected to generate 4.02 times more return on investment than Dow Jones. However, WuXi Xinje is 4.02 times more volatile than Dow Jones Industrial. It trades about 0.19 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.03 per unit of risk. If you would invest 2,975 in WuXi Xinje Electric on September 24, 2024 and sell it today you would earn a total of 1,215 from holding WuXi Xinje Electric or generate 40.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 93.75% |
Values | Daily Returns |
WuXi Xinje Electric vs. Dow Jones Industrial
Performance |
Timeline |
WuXi Xinje and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
WuXi Xinje Electric
Pair trading matchups for WuXi Xinje
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with WuXi Xinje and Dow Jones
The main advantage of trading using opposite WuXi Xinje and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi Xinje position performs unexpectedly, Dow Jones can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dow Jones will offset losses from the drop in Dow Jones' long position.WuXi Xinje vs. Shanghai Yaoji Playing | WuXi Xinje vs. Hunan TV Broadcast | WuXi Xinje vs. Zhongshan Broad Ocean Motor | WuXi Xinje vs. Xinjiang Beixin RoadBridge |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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